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Steven B. Cord
THE GOLDEN KEY TO CONTINUOUS PROSPERITY (How to Vote Yourself a Tax Break)
The proposal described in this book is simple enough:
Replace All Taxes on Income, Wages and Sales
With a Tax on the Annual Rent of Land
In bumper-sticker format: land tax good, all
other taxes bad. Or you might prefer – tax
locations, not things produced. This
book will show you how a simple change in the law can greatly increase your
net income. The proposal
advocated in this book can ensure prosperity for all and end
involuntary poverty and unemployment.
Let’s be perfectly clear about “land tax good” – the revenue from it is nice (sort of a bonus) but if it were thrown away or burned up in a huge annual bonfire on the White House lawn (or wherever) the economy would still greatly prosper. Of course, better uses can be found for the revenue, like reducing taxes on wages or sales.
Let’s not tax what people produce, let’s tax land instead.
Has this proposal already been tried? Yes, many times, and all empirical (factual) studies of these applications show a much-improved economy. See chapter three. In fact, as we will see, the long-run continuance of democracy depends on it.
If jobs aren’t taxed, won’t there be more jobs? If we don’t tax what people produce, won’t the prices of produced things be lower? Won’t involuntary poverty be eliminated? Cannot this tax lay claim to being the most important idea in the world’s history? In comparison, isn’t every other attempt at social improvement like rearranging the deck chairs on the Titanic?
It’s important that we reduce or replace taxes on jobs and produced things with another source of governmental revenue. This book will show how that can be done.
But don’t believe any of these claims until you see their ethical justification and factual substantiation; read on, then judge. This book will be presenting ample logic and evidence, but we can’t do everything at once.
This all sounds almost too good to be true – but remember, it has been tried on a small scale many times and has always succeeded. Chapter three will present some of the factual support in easy-to-read form and you can get brief summaries of 215 more empirical studies (preferably by email) and there are many more such studies! Do you require any more factual proof?
The explanation starts with our treatment of land, of nature.
How The Proposal WorksEvery land parcel can be rented out annually, and it is this potential annual rent, even if is not actually collected by landowners, that should be taxed, replacing as many other taxes as possible.
Important: do not merge land rent into the sale price of the building on it – these entities are entirely different and should be taxed differently. Land-rent income is clearly actual when the landrentowner and the improvement owner are different people, but when they are the same, as it is for most homeowners, the annual land-rent income is imputed - it exists even if it doesn’t actually change hands. The land’s sale price is based on it.
We are currently taxing land rent by taxing the land’s sales price, but eventually we should tax the annual land-rent income directly (and not the value of the building on it). If a land tax replaces other taxes, most people will save because they have little taxable land income.
Even vacant lots have an annual rent, which is why they can be extremely valuable. The annual rent is based on the land’s highest-and-best potential use (as permitted by zoning) and not at all on its current use.
This book does not advocate a higher tax on vacant land than on built-upon land. That’s a terrible idea. Rather it advocates a higher tax on all land rent, whether the land is built upon or vacant, instead of on buildings or other human-produced goods and services.
This higher tax on land rent is hereafter referred to as LRT. It can gradually replace such harmful and regressive taxes as the local property tax on buildings or the federal tax on payrolls.
Since one tax will replace other taxes, government revenue will not be diminished. Most people will get tax reductions because they have little land rent income, actual or imputed, but are hit hard by taxes on what they produce. You will be one of the savers unless a significant portion of your income comes from land ownership (but even then, you would benefit from a production-tax-free economy).
Lower taxes on things you produce while the government gets the revenue it needs - can you support that? This book will even propose a way for all wage earners to get take-home pay increases.
Consider this: every American’s share of the national debt, as of 12/04, was $24,510 (source: Heartland Institute), probably more now. Then add to that each American’s share of federal taxes, as well as the taxes and deficits of localities and states: the total exceeds what the average American earns yearly! Then multiply all this by four to see how the typical American family would be affected.
The largest single expense of an average lifetime is taxes, especially for those high up on the career ladder. Many Americans won’t have enough money for their entire retirement. We won’t be able to pay for social-security privatization unless we tax land values or rent. We are gradually becoming socialized as we increasingly tax labor & capital. The situation is worse in most other countries - but this book will show how this burden can be lifted.
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Wealth and Want
... because democracy alone hasn't yet led to a society in which all can prosper